Iceland installs center-left government

Valur Gunnarsson

REYKJAVIK, Iceland – A new center-left government took office in crisis-hit Iceland yesterday, headed by the country's first openly gay national leader.

Prime Minister Johanna Sigurdardottir and her Cabinet were officially appointed by the head of state, President Olafur Ragnar Grimsson, after a tumultuous week that saw Iceland's previous conservative government collapse over the country's economic meltdown. Sigurdardottir said one of her first acts “will be to change the leadership of the central bank.”

Central bank governor David Oddsson, a former prime minister, is disliked by many Icelanders, who say authorities helped cause the economic crash by failing to rein in reckless banks and businesses.

Sigurdardottir, 66, is a former flight attendant and union organizer, and served as social affairs minister in the previous government. She is Iceland's first female prime minister, and her Cabinet is the country's first to be split evenly between men and women. Sigurdardottir also is the first openly gay national leader of modern times, apart from Per-Kristian Foss, a Norwegian politician who briefly served as his country's prime minister in 2002.

The new government is a coalition of Sigurdardottir's Social Democratic Alliance and the Left-Green movement, and it will hold office until elections April 25. The new Cabinet has 10 posts, down from 12, with four going to each of the coalition partners and nonpolitical experts serving as ministers of business and justice.

Left Green leader Steingrimur Sigfusson is the new finance minister, signaling an economic swerve to the left after years of conservative rule.

“Today, laissez-faire economic policy leaves Iceland, which is severely wounded after years of it running the government,” Sigfusson said.

Iceland's conservative prime minister, Geir Haarde, resigned last week after months of angry protest against his government's handling of the economy. Thousands of Icelanders had been demonstrating against Haarde's government for months, clattering pots and kitchen utensils in what some have called the “Saucepan Revolution.”

Until recently, Iceland – a volcanic North Atlantic island with a population of 320,000 – was one of the world's richest countries, with a rapidly expanding economy. Its banking system collapsed in the fall under the weight of huge debts; unemployment is skyrocketing and the country's currency has collapsed.

The coalition partners are split on the issue, with the Social Democrats favoring membership and most Left-Greens against it.

Sigurdardottir's party also has said it will seek to overturn the previous government's decision, taken last month, to increase Iceland's annual whaling quota from about 50 to about 250 animals per year.

The move could be contentious, as Icelanders look increasingly to traditional industries such as whaling and fishing for employment.